Can the biggest borrower remain the world's biggest power?

Profes-sor Larry Sum-mers, President Obama's former Secretary of the Treasury asked a question year ago: "How long can the biggest borrower remain the world's biggest power?"
The United States budget is a vastly complex affair. But one fact stands out plainly: in layman's terms, America is broke.
China's sovereign wealth fund, which has more than $480 billion in assets, could cut holdings of US Treasury Bonds as they are becoming a less attractive investment, Chinese state media said on January 15.
US budget battles are restraining economic growth around the world, posing a greater risk to the global economy than even a renewed euro-zone crisis, the World Bank said on January 15.
In new economic forecasts, the bank said it expects the global economy to expand just 2.4% this year, barely better than the weak pace of 2012. The US, the world's largest economy, could fall into recession if federal budget cuts occur as scheduled in early March, while the euro-zone's downturn is expected to continue through the year.
The US government's outgoings will exceed income by about $1.5 trillion this year; over the next 10 years combined, the predicted gap is $8.5 trillion.
Given the partisan impasse on Capitol Hill over spending cuts and higher taxes, there is no reason to assume that matters will improve any time soon unless miraculous growth or political compromises create some unforeseen change over the next decade. There appears to be virtually no room for new domestic initiatives for the president or his successors.
Continuing, chronic American financial vulnerability also carries increasingly serious implications for US global influence and its standing as the world's only superpower. In short, the deficit and the mindset that produces it threaten the post-1945 security architecture.
In Asia, Africa, and the Middle East after World War II, the US extended its geopolitical pre-eminence and market dominance, filling a vacuum where the exhausted British and European empires once held sway. The UN was established in the US, not in Europe, whereas the League of Nations was set up in 1919 in Europe (Geneva).
Facing serious competition only from the Soviet Union, America supplanted the ''old world'' and took control. With the end of the Cold War and disappearance of the Soviet Union in 1991, the US entrenched its global grip.
In August 2011, President Obama noted in his West Point speech that the US could no longer finance open-ended wars. He said to the cadets: "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy. It taps the potential of our people and allows investment in new industry."
Now some argue it is America's ''East of Suez'' moment, when imperial Britain was forced to recognise it could no longer afford to project its power into every corner of the globe. While Europe could pass the security baton to the US, America has no like-minded successor to turn to.
On present trends, Obama's America badly needs "Old Europe" to secure international peace and security. However "Old Europe" suffers from lack of direction and is not united in its purpose and security strategy. It is divided on three issues among others -- Turkey's membership to EU, Kosovo and Cyprus.
With its economic woes, Washington is much more dependent on allies to help maintain international stability. For example, in recent days, French armed forces have occupied major towns from jihadists in Mali for which the US is providing only transportation for the French and African troops.
A question that comes to everyone's mind is whether China can replace in foreseeable future the US as the dominant power in Asia-Pacific region of the world.
The answer according to many American researchers is in the negative. The US continues as a power with global reach. Furthermore, a realignment of powers in Asia-Pacific seems to be afoot, and the role of Asean and Australia is perceived to have influence on the geopolitics of the region.
Observers say that the US has been forging alliance with Australia, Brazil, Mexico, South Africa, Turkey, India, Indonesia, South Korea and Japan to keep its dominance across the globe, including in the Asia-Pacific, with its 100 military bases. There are powerful reasons to invert the famous 1826 call by the British Prime Minister George Canning to bring ''the new world into existence to redress the balance of the old."
About 60% of US naval assets are being deployed in Asia-Pacific region to maintain its naval supremacy in the region and to demonstrate that the US is also a Pacific power. The US is reportedly putting another aircraft carrier group in Asia. It is building new littoral combat ships to be deployed from Singapore. It has already deployed F22 Raptor fighter jets to Okinawa and is developing ballistic missile shield with Japan.
Although China's defence focuses on the South China Sea to defend its claims over a group of islands, its neighbours are getting nervous and beefing up their own arsenals.
The latest figures given by the Stockholm International Peace and Research Institute (SIPRI) show that the value of defence imports in Asia (biggest arms spenders are China, India, Japan, South Korea and Taiwan) grew by 25% across the four yeas to 2011. Put together with Oceania, the region accounts for 44% of all arms imports.
According to SIPRI, China's spending on defence has remained 2% of GDP, while the US continues to spend almost 5% of GDP on defence, thus the US leads the way on spending figures. Countries such as Canada and Germany spend only 1.4% of GDP on their military.
The end of the American empire has long been foretold by many. But it did not happen because the US has an incredibly dynamic society, high levels of entrepreneurship and the best universities in the world. Many argue the emerging international system is likely to be quite different from those that have preceded it with the US as leader for many years to come.

The writer is a former Bangladesh Ambassador to the UN, Geneva.